Apr, 2015     

Growth of Indian e-logistics


The Indian Story for Logistics Industry

Insights

  • The Indian E-retail industry is expected to grow at a CAGR of ~47% to over $100 billion by 2022, 10X growth from the current valuation
  • The logistic industry is witnessing a CAGR of 12% where as for e-commerce it is growing at a rate of ~16-18% annually
  • This creates logistics as a biggest challenge in e-tailing – A key differentiator for 'e-tailers'

3PL companies to capture ~40-45% of the market share few years down the line needs to scale up by 10X

Heavy Investment is required to ensure last mile connectivity

  • Tier 2 and Tier 3 cities are expected to contribute to more than 350 million shipments by 2018. infrastructure to cover more than 15000+ pin codes by 2020
  • Scale up by 10X to develop a network of branches and delivery points that will be able to service high-growth cities
  • Given the amount of capital raised by e-commerce companies, logistics firms would need at least $500 million to $750 million to match their scale of growth in the next few years

The sheer volume of CoD orders will require enhanced cash handling capabilities

  • Dominance of Cash on delivery (COD) orders suggesting that logistic providers need to handle a $8 billion cash by 2018
  • This would require effectively manage cash flow and address challenges such as theft, the use of cash for working capital and reconciliation issues

Man Power Management and Adaption to Technology will bolster growth

  • High stress on Man power management as delivery staff team expected to increase from 2X to 5X level
  • Increased focus on robotic technology would increase daily shipments by 2X and reduce processing time
  • Out of Box solutions required to go to a higher level in the value-chain – managing inventory, handling invoicing, providing consumer insights and other value-added services

~52% of the shipments consist of electronic items

% share of 3P logistic player by volume of forward shipments done for e-commerce

  • Indian Postal Services have a major share of volume due to its vast distribution network in Tier 2 and Tier 3 cities
  • ekart’s daily shipments amounts to ~30% of the total daily shipments from third party logistics
  • GoJavas form a significant of 15% share as it handles major of the Snapdeal’s business




This document covers a view on the Indian e-logistics market covering the performance of the various players in it. It also covers how the e-logistics ecosystem is going to evolve.

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